"Update: After talking to Bedier backstage, he clarified that the State Department did not directly talk to PayPal"
This is starting to look like an attempt at ass covering that backfired badly.
This is looking very, very fishy.
Congress-critters fighting over a microphone are not a useful source of information about the state of the law.
It's actually fairly common for congress critters to say "this shows that we need a law" when there already is such a law. In some cases, they then use the current incident to pass a completly different law.
Only one called their lawyers to ask if it was legal.
It is not. Freezing an account is a safe response to legal documents that have legal force, from a court requesting that this be done Some vague threat by an unnamed bureaucrat should be treated as nothing more than political pressure.
They unwind all the transactions and give the money to the people that originally sent money to Wikileaks, right?
Are you kidding me? That Machiavellian sanity-grinder gave Notch, a legitimate indie developer selling a game about digging through dirt, Hell on Earth just to get his money.
PayPal doing the right thing, snorts I'll sprout wings and shave my eyebrows off first.
I'd sooner trust the IRS to do right by me than PayPal.
Disclosure: My first entrepreneurial effort was annihilated in concert by UPS, PayPal, and eBay.
I replied that yes, you can, and you should not expect rationality or good faith from these people, only savagery. I was down-voted into oblivion. This filled me with confidence, so I donated that very day. Later that afternoon, Paypal caved. Evidently I was the last straw. ;)
What I want to know is, why should harmless fuzz-balls like us have to worry about anything in life? We are but simple people, minding our own business in honest toil, needing only our daily ration of beer and bread. Now if I could just write that with an Irish accent.
All of us little old England are so glad we have never experienced any terrorist attacks before 911
What they did in his situation was entirely justified and I'd personally suggest it was exactly what they should have done. I'm sure there are many times when Paypal have done wrong, but this really isn't one of them.
[1] http://www.minecraftforum.net/viewtopic.php?f=17&t=91042
I'm sure, by now, Paypal has figured out that Wikileaks isn't illegal - based on all the calls by lawmakers to ban it, if nothing else. Have they restored the account yet?